If you are thinking about implementing a new Enterprise Resource Planning (ERP) solution, the first questions you are probably asking yourself are how much will it cost and how long will it take to implement. This article is going to talk about budgeting for Microsoft Dynamics GP, NAV and SL. They are all very similar in pricing and usually good choices for companies in the $10 million to $500 million revenue range.

Deployment Method

The first thing you need to decide is what deployment model you want – software as a service (SaaS) or on premise. If you have questions about which might be best for your organization please refer to my Cloud v. On Premise Accounting Software blog.

Software Cost

You then need to decide on the number of users you will need. For purposes of this exercise we will consider only full read/write users. Read-only and other limited user types are usually so much cheaper than the full users that they are not that useful for preliminary budgeting purposes, unless you need hundreds of them. In that case just go ahead and call us and we can help you develop a budget for your specific situation.

Now that you have decided on the number of users it is time to do some simple math. Multiply the number of users by the user cost and add any other items listed below.

On Premise

On Premise users: $3,000 each one time fee and 18% annually

Add $10,000 if you need to add project accounting or manufacturing, along with the 18% annual maintenance fee

Example for a 10 user manufacturer:

10 X $3,000 + $10,000 = $40,000 onetime fee

$40,000 * 18% = $7,200 annual maintenance fee (due in year one and every year thereafter)

SaaS

SaaS users: $285/month or $3,420 annually if you just need financials and/or distribution

SaaS users: $300/month or $3,600 annually if you need to add manufacturing and/or project accounting (this is not additive, it is just $300 instead of $285)

Example for a 10 user manufacturer:

10 X $300= $3,000 monthly fee, or $36,000 annually

Implementation Services

The second part of the preliminary budget calculation is the implementation services, which are required in order to help you get the software up and running. Implementation services include things like data conversion, business process review, module setup and configuration, training, testing, etc. Use the following table to get an idea of what your implementation might require. A rate of $185/hour has been used to calculate the dollars.

So for our example from above here would be the final rough budgeted amounts:

10 user manufacturing on premise:

Software Year 1: $40,000

Annual Maintenance Year 1: $7,200

Implementation Services: $69,375 (high/low average)

Year One Total: $116,575

10 user manufacturing SaaS

Software Year 1: $36,000

Implementation Services: $69,375 (high/low average)

Year One Total: $105,575

Don’t forget to add other things like new hardware if you need it for on premise. Also please note that this is just a guideline for preliminary budgeting purposes. There are often add-on modules, customizations and/or integrations that may be needed that can increase the price. Every deal we do usually includes one to three add-on products.

Timing wise, engagements typically require anywhere from two to three months start to finish for financials only engagements. Manufacturing or complex project accounting deals can take up to five or six months.

What About Dynamics AX and CRM?

Microsoft Dynamics AX is the other Dynamics ERP offering and it differs from GP, NAV and SL in that it is intended for (much) larger organizations. The software itself does not cost that much more but the implementation costs are generally two to four times that of its mid-market focused siblings. A guideline for AX is that engagements, including software and implementation services, start at $500,000.

Microsoft Dynamics Customer Engagement, or "CRM", applications on the other hand are designed for organizations of all sizes. Most people are opting to go with CRM Online these days which starts at $65/user/month. We can get you up and running in as little as a few days for simple projects. If you require integrations, customizations and a lot of workflows that can easily turn days into weeks. For budget calculation purposes a bare bones project would be in the $2,960 to $4,440 for 16 to 24 hours of implementation services. More complex projects should be calculated in weeks using a cost of $7,400 per week. Two to four weeks of time is fairly common.

Contact Us

Hopefully this is enough to get you started to develop a preliminary budget. Please keep in mind every situation is different and may not fit perfectly with any of the above listed scenarios. If you have other needs not listed above or want to discuss your specific situation please feel free to contact us.